Release: Cue Energy: Jeruk -3 begins drilling

January 24, 2006 ? Cue Energy Resources Limited is pleased to announce that the Jeruk -3 appraisal well began drilling on 24th January 2006. Jeruk -3 will continue the evaluation of the Jeruk oil discovery.

The Jeruk oil discovery is located approximately 40 km south east of Surabaya, in the offshore Sampang Production Sharing Contract, East Java, Indonesia.

Jeruk -3 is being drilled as a deviated well to penetrate the objective Kujung carbonate in the central crestal area of the Jeruk structure. The total depth of the well is anticipated to be approximately 5500 metres measured depth (5200 metres vertical depth). The well is expected to take approximately 90 days.

Economic interests in the well are expected to be as follows:
Santos Sampang Pty Ltd 40.5% (Operator)
Medco Strait Services* 22.5%
Singapore Petroleum Sampang Pte Ltd 19.64%
PT Petrogas Oyong Jatim** 10%
Cue Sampang Pty Ltd 7.36%

* pursuant to an agreement with Singapore Petroleum and Cue
** subject to finalization of legal documentation (end of release)